Question

which of the following is NOT a characteristic of a partnership?

A. Unlimited liability

B. Mutual Agency

C. Co-ownership of property

D. Unlimited life

Answer 1

Concepts and reason

Partnership: It is the mutual agreement between two or more people who are voluntarily associated to do business together on agreed terms and conditions voluntarily. It can be either in the written or oral form. Partners and partnership have a mutual agency relationship, it means that the partnership is answerable for partners and partners are answerable for the partnership.

Fundamentals

Partnership creates co-ownership among partnership property. Every partner is the co-owner of partnership property.

The partnership has a limited life as the partnership change with the admission of the new partner, retirement of the old partner, the sale of the business, or the liquidation of the business.

There is a mutual agency among partners and the partnership firm. Firm and partners are liability towards the acts done by them, which create a mutual agency relationship.

Under the partnership, each partner has unlimited liability towards firm debt and partners also personally for the debt of the partnership.

Determine the characteristics of partnership:

The characteristics of the partnership are co-ownership, limited life, mutual agency, and unlimited liability of partners.

Determine which one is not a characteristic of partnership:

Unlimited life is not a characteristic of partnership.

Ans:

Unlimited life is not a characteristic of partnership.